Private-sector players have long been calling for a space law which regulates liability issues and provides planning security for the New Space sector. On 4 September 2024, the German Federal Government published a paper setting out the key points that are to form the guidelines for the future German Space Act (Weltraumgesetz or WRG).
With this paper, the German government aims to enable economic exploration while protecting public safety and order as well as national security whilst considering international defence interests and international regulatory obligations. In particular, the WRG is intended to strengthen the space industry and make it more competitive, which should benefit start-ups and SMEs in particular.
A draft law is expected later this year.
Who is affected by the Space Act?
The WRG affects space activities of domestic persons and associations carried out from within or outside Germany as well as general launch facilities or space activities launched from German territory or from ships and aircraft registered in Germany.
Accordingly, other applicable legal systems may have to be considered in addition to the German legal system. For this reason, it should be possible to waive the application of the WRG if a comparable level of protection exists in another legal system. However, it can be assumed that the recourse options under the WRG and the need to avert danger to national interests will be relevant as conditions for approval.
The WRG does not apply to space activities of the federal government and the federal states, nor to space activities under the direction of international governmental organisations such as ESA, EUMETSAT or NATO, the EU and within the framework of the International Space Station (ISS).
What requirements must be met for space activities?
Licences
With the WRG, the Federal Government makes space activities and the operation of a launch site subject to authorisation. The modification and transfer of such activities will also be subject to authorisation. To this end, the WRG defines both the authorisation requirements and the authorisation procedure.
For a licence to be granted:
- there must be no well-founded doubts as to the reliability, professional competence and effective administrative action of the authorities in relation to the operator
- Precautionary measures must have been taken to protect public safety and order.
- Precautionary measures must have been taken in the interests of sustainability in space and on Earth, including the avoidance of space debris and the environmental compatibility of a launch site (covered by the Environmental Impact Assessment Act).
- there must be no concerns regarding national security, defence interests and Germany’s international obligations,
- the operator must have taken measures in advance to ensure the orderly termination of its activities, and
- the necessary insurance cover must be demonstrated.
A licence granted for space activities shall not replace parallel licensing requirements from other areas. This means that, under certain circumstances, several licensing procedures – possibly at different levels – may have to be carried out in parallel, in addition to licences from other countries.
The requirement for precautions to ensure sustainable use and prevent contamination is particularly important. It is not yet clear how precautions for sustainable use are to be designed, whether contamination refers only to space debris and what consideration of environmental concerns on Earth entails.
In the field of satellites, the legislator specifies that satellite constellations (several satellites with a common function) are to be understood as a single space activity, meaning that approvals do not have to be sought for each individual satellite.
Liability insurance or guarantee
According to the key issues paper, non-governmental operators must take out liability insurance or a bank guarantee as a prerequisite for obtaining a licence. The WRG is to provide for a no-fault recourse claim by the Federal Republic of Germany against the party responsible if a liability claim exists against another state under space law treaties.
The recourse claim shall be limited to 10% of the average annual turnover of the last three financial years in the event of non-intentional and non-gross negligence on the part of the operator and compliance with the licence and ancillary provisions and shall be capped at EUR 50 million.
At this point in time, no limitation of liability towards (private) third parties is envisaged.
As already stated in the authorisation, satellite constellations are to be regarded as a single space activity. However, as this increases the risk, the maximum insurance or guarantee amount should take this into account.
According to the key points paper, universities and research institutions with a non-profit purpose are exempt from recourse, provided they do not act intentionally or with gross negligence, as are state players.
Which authority is responsible for approval?
The competent approval authority is to be located within the BMWK. However, all “interested” departments will be involved in a time-limited procedure at their own request. Approval shall only be granted in “agreement” with the departments. The WRG thus grants them a right of veto.
Do space objects have to be registered?
According to the key issues paper, the WRG provides for the registration of space objects in accordance with the Convention on Registration of Objects Launched into Outer Space of 14 January 1975 (Federal Law Gazette 1979 II p. 650, 651).
What does the WRG mean for the New Space industry?
The contents of the WRG meet expectations and hardly deviate from the standard topics of space laws in other European countries.
The German government talks about strengthening the space industry, but the key points of the bill only hint at this. Start-ups and SMEs in particular fear that the WRG will lead to excessive bureaucracy. Double regulation with the EU Space Law announced for 2025 should be avoided at all costs. The key points paper takes precautions and provides for an adjustment of the plans for the WRG should the EU initiative move forward.
The far-reaching access rights of the German Armed Forces can be viewed with ambivalence. For “defence purposes, in particular to avert danger,” it may request the “prior provision of services” from operators of space activities. Although this is to be compensated “in line with market conditions,” it could nevertheless deter private investors. The use cases must be more clearly defined and delimited in the WRG.
The creation of a separate authority within the BMWK could also lead to cuts in the New Space industry. This could be financed from the national space budget, which would further reduce the funds already cut by the government.
However, the capping of recourse claims against the Federal Republic of Germany or other states at EUR 50 million per damage event is very welcome and should give the new space industry significantly more planning security. This would bring the standard recourse below the maximum limit of EUR 60 million set in various European space laws. This is particularly beneficial for start-ups and SMEs, which (still) have low annual turnovers. It is also beneficial that the risk potential does not appear to be given any further consideration in the context of the recourse claim.
It remains to be seen whether the WRG will also allow other forms of coverage that are more liquidity friendly. Liability towards (private) third parties is not mentioned in the key issues paper; this would therefore be possible without limitation. The draft law will ultimately show whether a model commonly used in other countries, whereby the state protects the player through a guarantee obligation above the maximum liability amount, will apply.
